Question

3. What are the recognition criteria for income under the conceptual framework? How do these differ from the key stated purpose of AASB 15/IFRS 15?

Answer 1

under conceptual framework an income is recognized in the income statement when an increase in future economic benefits related to an increase in an asset or a decrease of a liability has arisen that can be measured reliably. it means the the cost must be reliable and there must be a increase in asset or decrase in liability for example when a sale occusr for cash ,cash is an asset which increases .this sale is under the criteria.

according to IFRS 15 revenue is recorded when the goods or services are transfered to the customer,at the trandaction price.

the difference between the income recognition under conceptual framework and IFRS 15 is that in conceptual framework the revenue is recognized when there is an increase in the future economic benefits but under IFRS 15 the revenue is recognised at the time of transfering of goods or service to the customer,not the time of recieving payments.